The balance between innovation and competition: the Hatch-Waxman Act, the 2003 Amendments, and beyond

In 1984, Congress passed the Hatch-Waxman Act, a landmark statute designed both to encourage innovation by pioneer drug companies and to increase competition by generic drug companies. After its enactment, drug companies attempted to "ga the regulatory regime to their respective economic advantage. In 2003, in an effort to address these issues, FDA promulgated a final rule and Congress passed the Medicare Modernization Act, amending the Hatch-Waxman Act. This article provides a comprehensive look at the 2003 statutory and regulatory changes. First, the article analyzes the history and provisions of the original Hatch-Waxman Act and the issues that arose after its enactment. Second, the article discusses the passage of the 2003 FDA rule and the 2003 Medicare Modernization Act. Next, the article demonstrates that, although the 2003 amendments may have definitively resolved some issues, the amendments did not resolve all interpretive issues and have even led to unintended consequences. In particular, the article discusses several areas of current controversy, including the effect of patent delisting and patent expiration on 180-day exclusivity, the patent delisting counterclaim provision, the declaratory judgment action provision, patent settlement agreements, and authorized generics. Finally, the article assesses the potential for future reform of the Hatch-Waxman Act. The article concludes that maintaining the balance between innovation and competition will likely remain a daunting task for legislators and regulators in the future.

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